Finding Text
Finding reference number: 2025-001 Assistance Listing (Federal award identification number and year): Project Based Rental Assistance (PBRA) CFDA No. 14.195 (HAP Contract No. TN40-0020-01 and 2016) Auditor non-compliance code: J – Unauthorized management fees Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $111,706 Statement of condition 2025-001: The Former Agent did not obtain a HUD approved Project Owner's/Management Agent's Certification (Form HUD-9839-B) and the Property paid unapproved management fees to the Former Agent. Criteria: The HUD Management Agent Handbook and Chapter 3 requires the management agent to have a HUD-approved Project Owner's/Management Agent's Certification in order to manage the Property. Effect: The Corporation is not in compliance with the HAP Contract. Cause: The Project Owner's/Management Agent's Certification expired on December 31, 2015 related to the Former Agent and an updated certification was not submitted to HUD for review and approval to extend the term prior to management transitioning to the Agent. Recommendation: The Agent should obtain a HUD-approved Project Owner's/Management Agent's Certification. Management's response: Management concurs with the finding and recommendation. Management of the property transitioned to the Agent on June 1, 2025 and the Agent received a HUDaproved Project Owner's/Management Agent's Certification for the Property.